Harnessing Technology for Women Entrepreneurs to Drive Inter-African Trade and Economic Empowerment: Leveraging technology to empower women entrepreneurs for cross-border trade
AUTHORED BY: VANI MOODLEY
CHIEF EXECUTIVE – VANI MOODLEY & ASSOCIATES (PTY) LTD
GLOBAL ENTREPRENEURSHIP, EXPORT, LEADERSHIP, MANAGEMENT AND MENTAL WELLNESS TRAINING, COACHING AND DEVELOPMENT SPECIALISTS
ABSTRACT
Whilst global investments into Africa and interest in business start-ups and business growth and expansion are increasing, statistics do not always indicate the number of women-owned business beneficiaries. Although investment interest and commitment have grown significantly, the Venture Capital in Africa Report (2023, April) indicates that only twenty-six percent (26 %) of venture capital investments in Africa in 2022 were for start-up businesses with female founders or multiple founders, including at least one female. This paper highlights Digital Technology and General Barriers Experienced by Women Entrepreneurs in Cross Border Trading. It highlights critical factors to consider when leveraging technology and opportunities to empower women entrepreneurs for cross-border trade. The formal and informal institutions must be mobilised to create gender parity in digitisation and export for women entrepreneurs.
Key Words: Women Entrepreneurs, Digital Technology and Gender Barriers, cross-border trading, global investments in Africa, digitisation, leveraging technology, opportunities, and empowering women entrepreneurs.
Introduction
The Digital Transformation Strategy of the African Union has set a digital inclusion goal for every African by 2030 (Porfido & Marks, 2020). The focus is on removing barriers for African women and girls to participate in the digital economy and to facilitate an enabling technology-oriented entrepreneurial environment. Due to the potential for exponential economic growth, investors have funded technology in Africa and invested in venture capital for Africa-based start-up businesses to the value of $2 billion (two billion) United States Dollars in 2019 (Porfido & Marks, 2020) and $5.2 billion (five and a half billion) United States Dollars (of the global investment of US$445 billion) in 2022 (Venture Capital in Africa Report, 2023). This investment interest and commitment has grown significantly since. According to the Venture Capital in Africa Report (2023, April), twenty-six percent (26 %) of venture capital investments in Africa in 2022 were for start-up businesses with female founders or multiple founders, including at least one female.
Whilst the rise of the digital economy in Africa is celebrated, gender inclusivity remains a challenge (Porfido & Marks, 2020). Despite women being central to the digital economy as creators and consumers of technology, African women continue to face barriers to participating fully. Disparities in gender, earnings, wealth, leadership and access to finance will be exacerbated if current trends continue. Women are also underrepresented and marginalised as tech entrepreneurs.
The significant motivation underlying this increased investment interest was based on the following research facts that have emerged:
- The technology sector is growing exponentially in Africa compared to any other region. This is based on the volume and year-on-year expansion data.
- Digital Markets and Information Technology are accelerating job creation and expanding market access.
- Africa has the fastest-growing youth population in the world and the fastest-growing market for mobile technology.
- The growing urbanisation on the African continent increases the demand for access to technology.
Investments in the technology sector in Africa
The African technology sector received $466 (four hundred and sixty-six) million United States dollars in the first quarter of 2024 (Oriarewo, E.,2024) through equity, debt and grant funding. Thirty-five per cent of this investment was allocated to start-up businesses in Nigeria. According to a report by Tech Cabal, the technology sector contributes more than oil to Nigeria’s Gross Domestic Product (GDP). The technology sector contributed 16.66 % to the GDP in quarter four of 2023, and the Oil sector contributed 4.70 % in the same quarter (Oriarewo, E.,2024). This report does not provide data on gender inclusivity or the number of women-owned start-up beneficiaries.
Digital Technology and General Barriers Experienced by Women Entrepreneurs in Cross Border Trading.
Whilst women face multiple barriers as entrepreneurs, digital barriers to export exacerbate the already challenging ecosystem.
In the Author’s experience of facilitating women entrepreneurs to export products and services over the past twenty years, the following has been experienced:
- Access to information, knowledge and experience navigating global network platforms is limited.
- Access to and research on information and knowledge on export country, labelling requirements (especially food), banned products, compliance requirements, competitors, and target market is limited.
- Access to well-constructed websites and online shopping or ordering systems is limited.
- Entrepreneurs invited by government departments on trade missions do not necessarily have the skills and knowledge about trading internationally, incoterms, technology, and the cost of shipping.
- Current markets have not been exploited fully before the export goals. Exploiting the local market is vital to entrepreneurial experience and product or service refinement.
- Knowledge of digital tracking of goods from the port of origin to the destination is limited.
- The capacity to meet export orders is limited, and women entrepreneurs are overwhelmed when global clients request large quantities and orders are declined without exploring alternatives.
- There is limited understanding of contract negotiation.
- Women are trusting, and online checks and balances using technological networks are not effectively conducted before the transaction. Their trusting nature has resulted in lessons learnt at a high price.
Factors to consider in leveraging technology and opportunities to empower women entrepreneurs for cross-border trade.
An integrative model of entrepreneurial ecosystems consisting of the following can influence the operational constructs of the broader concepts of institutions and resources in an entrepreneurial ecosystem.
- Formal and informal institutions that reflect societal norms and “rules”. The rights and obligations of formal institutions are embedded in laws and regulations, for example, property rights and bank lending policies, whilst informal institutions reflect the norms and values that shape the cultural context in which entrepreneurship is embedded in society (Matthee et al., 2023). Women may be treated differently from men, given the expectations in the home. Their ability to balance multiple roles may result in limited time and exposure to networks, access to training and development in technology, working irregular hours, and engaging in international travel.
- Access to social and business virtual networks for experiential knowledge, not limited to women.
- Attending and building networks in foreign markets with key players through participation in international trade shows.
- Optimising global relationships through local business chambers and embassy offices based in specific countries using online technology.
- Digitise the business operations and upgrade the physical infrastructure to become export-ready, assess and improve production processes to optimise productivity and develop the required capacity to meet export demand (Van Eldik et al., (2005).
- Access information and training on available technology, including digital technology, online research skills, and the use of artificial intelligence platforms.
- Create a conducive, psychologically safe space that encourages innovation, creativity and skills transference to optimise productivity and streamline critical activities.
- Women entrepreneurs require exposure to export promotion agencies and support through subsidised interventions to improve their prospects of business success in the domestic and international economies.
- In terms of leadership, access to knowledge and exposure to digital technology, Matthee et al. (2023) espouse that fewer women than men venture into foreign markets due to being more risk-averse than men and women tend to be more motivated by social goals than generating a profit, whilst Van Eldik et al found that twenty Australian women exporters have a more positive attitude towards exporting and experience it as a life-changing experience that facilitated women to grow personally, professionally and in business success.
- Research international market trends, global competitors and market opportunities in foreign markets.
- Access to finance, mainly export bridging finance, is essential for small businesses’ growth and continued survival. However, women can find it challenging to secure this funding, given their experience of higher rejection rates than men and their more likely tendency to seek alternate sources of funding (World Bank & WTO, 2020). This can present serious challenges to growth and limited export potential. Challenging development financial institutions and banks to review and neutralise their policies and encourage diversity without discrimination will level the economic playing field.
- Access to knowledge and information on export processes and procedures, the regulatory environment, exporter training, and technical assistance on regulatory compliance, which is difficult to access. This results in women depending heavily on personal networks and service providers, shipping and customs agents. Tailor-made assistance would assist with foreign market entry, diversify export markets, and generate increased returns.
- Reports on global and regional financial investment in small business in the form of development interventions and investment must include statistics on beneficiaries that include gender diversity. This will assist in monitoring the input and impact of gendered interventions on the digital and export sectors.
- Optimising relationships with the entrepreneurial ecosystem, viz., development financial institutions, banks, government entities, freight forwarders, customs brokers, inspectors, ports of destination, venture capitalists, attorneys, accountants, and chambers of commerce, can positively impact trade facilitation and access to networks globally.
The diagram below, compiled by Matthee et al. (2023), graphically summarises the ecosystem that must be facilitated to optimise the role of women entrepreneurs in global markets, as explained above.
(Matthee et al., 2023)
Conclusion
In addition to the varying types of implicit bias that women have to fight against, there is also the much newer concept of the broken rung. The glass ceiling refers to a visible yet impenetrable barrier for women in the workplace, whilst the broken rung allows women to see the top but obstructs their ascent. The broken rung metaphor suggests that a critical step is missing in climbing the corporate ladder. This missing rung symbolises a systemic barrier at the foundation of career progression, hindering women from taking the initial step towards advancement (Porfido & Marks, 2020). The broken rung can be as fundamental as access to digitisation and technological advancements in industry. Cohesive and committed interventions to enhance and leverage the above factors can effectively level the economic and digital playing field for women entrepreneurs.
REFERENCES:
- Leveraging Technology for Women’s Empowerment at Work Jordan, R. (2024, March). Leveraging Technology for Women’s Empowerment at Work
- Porfido, D. and Marks, Z (2020, October 1). Women and the Digital Economy in Africa, Policy Brief. Harvard University Centre for African Studies. Available@:https://africa.harvard.edu/files/africanstudies/files/women_entrepreneurship_in_africa_policy_brief_-_digital_economy_final.pdf
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- Matthee, M; Myres, K.; Scheepers, C and Mamabolo, A. (2023). Lived experience of women entrepreneurial exporters in a developing country context. Available @:https://www.wto.org/english/res_e/booksp_e/making_trade_work_for_women_ch4_e.pdf
- Van Eldik, S. and Viviers, W. (2005). The Measurement of Export Readiness of Companies in South Africa. Southern African Business Review 9(2): 1-11.
- World Bank and World Trade Organization (WTO). (2020). Women and Trade: The Role of Trade in Promoting Gender Equality, Washington, D.C.: World Bank.